Baidu, operator of China’s dominant search engine, has reportedly put up for sale its entire stake in iQiyi, the country’s second largest conventional video streaming platform. IQiyi has close to 1…
. Worse, the COVID-19 crisis helped Tencent overtake iQiyi in conventional subscriber terms and gummed up iQiyi’s content supply pipelines, causing a portion of its customers to flee. The company took an ax to staff and has slowed its push into international markets.With the shares at $4.67 at Tuesday’s close, the company is valued at $3.74. Reuters calculates that the $7 billion price that Baidu is seeking equates to a per share valuation of $8.13.
China’s conventional streaming market is ripe for consolidation. But it is not clear how that will pass official muster. Neither Tencent Video nor Youku is consistently profitable, their earlier attempt to buy iQiyi was reportedly rebuffed by Baidu. Now, Chinese regulators have turned frosty towards the tech giants and may not permit them to swallow up competition by making heavyweight acquisitions.
Meanwhile, short form streaming platforms such as Tiktok and Kuaishou, entertainment specialist Bilibili, and live streaming and games firms, such as Douyu and Huya, are successfully competing with the mainstream streamers for consumer eyeballs. Reuters reported the China Telecon-backed streamer Migu TV as being among the likely bidders. It also named Hong Kong-based private equity firm PAG as a potential buyer.